First Republic stock plunges 46% as report says FDIC receivership likely
According to a CNBC report, the FDIC, the Treasury Dept and the Fed are among govt bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank
- Apr 28, 2023,
- Updated Apr 28, 2023 9:55 PM IST
Shares of First Republic Bank plunged to a record low on Friday, losing nearly half of their value after a report said the troubled US lender was most likely headed for receivership under the US Federal Deposit Insurance Corporation (FDIC).
The stock fell as much as 46% to $3.33, giving it a market capitalisation of $620 million. Trading in the bank's shares was halted multiple times.
A Reuters report of a government-brokered rescue deal for First Republic had pushed its shares up as much 6.6% earlier in the session.
According to a CNBC report, the FDIC, the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank.
The government's involvement was helping bring more parties, including banks and private equity firms, to the negotiating table, one of the sources for the report had told Reuters.
Still, concerns remained that deposit declines at First Republic could worsen and spark a fresh meltdown in the U.S. banking industry even as it recovers from the collapse of two regional lenders last month.
First Republic earlier this week said its deposits had slumped by more than $100 billion in the first quarter.
"The potential worst-case scenario stemming from the collapse of Silicon Valley Bank appears to have been averted," said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.
"But the problems at First Republic are a reminder that further problems remain possible."
The San Francisco-based lender's stock has more than halved so far this week. Since the start of the year, it has lost nearly 97% in value, making it the worst-performing S&P 500 stock.
With inputs from Reuters
Shares of First Republic Bank plunged to a record low on Friday, losing nearly half of their value after a report said the troubled US lender was most likely headed for receivership under the US Federal Deposit Insurance Corporation (FDIC).
The stock fell as much as 46% to $3.33, giving it a market capitalisation of $620 million. Trading in the bank's shares was halted multiple times.
A Reuters report of a government-brokered rescue deal for First Republic had pushed its shares up as much 6.6% earlier in the session.
According to a CNBC report, the FDIC, the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank.
The government's involvement was helping bring more parties, including banks and private equity firms, to the negotiating table, one of the sources for the report had told Reuters.
Still, concerns remained that deposit declines at First Republic could worsen and spark a fresh meltdown in the U.S. banking industry even as it recovers from the collapse of two regional lenders last month.
First Republic earlier this week said its deposits had slumped by more than $100 billion in the first quarter.
"The potential worst-case scenario stemming from the collapse of Silicon Valley Bank appears to have been averted," said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.
"But the problems at First Republic are a reminder that further problems remain possible."
The San Francisco-based lender's stock has more than halved so far this week. Since the start of the year, it has lost nearly 97% in value, making it the worst-performing S&P 500 stock.
With inputs from Reuters